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How the Los Angeles Dodgers Sold for $2 Billion

Kerry Guard • March 28, 2012 • 2 minutes to read

In 2004, Frank McCourt purchased the LA Dodgers franchise for $430 million. This January, the club was $579 million in debt (in spite of McCourt taking out a personal loan to cover payroll halfway through the year) and the dust had just settled over the hostile takeover the MLB performed in removing the club from McCourt's grip.

So when it was announced yesterday that he was unloading the franchise for a record $2 billion to a Magic Johnson led group of investors, many people asked the same question:

How do you go from $430 million to $2 billion?

Here are a few of my thoughts, coupled with ways that brands could learn from this monumental transaction.

Focus Offers on a Local Level

Magic Johnson is a minority owner in this deal, with New York based Guggenheim Partners ponying up the majority of the cash to make this deal happen.

But bringing Magic into the conversation, a perennial all star for the Lakers in the late 80's / early 90's and current LA mainstay who owns fitness centers, Starbucks', entertainment complexes & more, made this deal a reality. It was Magic's feet on the ground in Los Angeles that helped push this deal through.

What Brands Can Learn: Offer your product / service on a localized level that allows local heroes to advocate for your brand, product or service.

Throw in 'Something Sweet'

Why do you think Magic Johnson was so interested in pushing this deal through?

Well, the deal included $150 million worth of real estate surrounding Dodgers stadium, which -- as you may have already guessed -- Magic is extremely interested in developing.

What Brands Can Learn: The 'cherry on top' doesn't have to be a free offer -- it simply needs to be something that will make your brand advocates sit forward in their seat and listen up.

How will you do your best Frank McCourt impression and quadruple the value of your investment?

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